- Dealers forced to change their stocking profiles and OEMs extend used car schemes to 100,000 miles to cope with the used market
- Leasing companies keep a close eye on the used EV market as two-thirds of new car order banks are full electric
- Seasonal used car market around March and September plate changes have disappeared in 2020 and 2021
Aston Barclay has reported record-breaking price increases of more than 40% in the first nine months of 2021 across three sectors of the used market.
In its recently published Market Insights report sub-24-month late and low, fleet and 55-75-month-old part exchanges rose by 46.9% (£6,865), 40.8% (£4,248), and 40% (£2,876) respectively.
These extraordinary price rises were in response to the used market coping with numerous pandemic lockdowns and having to adjust to used car demand exceeding supply as new car volumes continued to fall.
What’s also changed during 2020 and 2021 is the lack of seasonality with the typical increase in dealer part-exchange volumes generated by March and September new car plate changes failing to materialise due to below-average new car sales. Dealers have also retained more part exchanges to feed their stock shortages.
The result is that every used car dealer has had to change their stocking profile to keep their forecourts busy, while many OEMs have responded by extending their used-car programmes to 100,000 miles for the first time.
Aston Barclay is seeing this new strategy reach the budget end of the market at above 126 months which has received renewed interest from younger drivers passing their test and from workers switching away from public transport. Prices in Q3 rose by 9.9% (£140) to a record £1,552 despite a steep rise in average age and mileage to 164 months and 96,500 miles.
“Dealers have had some tough market conditions to contend with since March 2020, but they have got progressively more difficult in Q2 and Q3 2021. Dealers are having to contend with paying way above book values for stock as well as increasing used car prices while they are on their forecourts due to the speed at which the market is constantly changing,” said Martin Potter, Aston Barclay’s Managing Director – Customer.
“We’ve also seen some dealers report unsold stock after 60 and 90 days being sold back into the wholesale market for profit. Meanwhile, vendors have continued to invest in refurbishing cars to grades one, two, and 3 to take advantage of the buoyant market,” he added.
Not surprisingly all fuel types saw a price rise during Q3 with EVs reporting the biggest rise to £22,354. However, volumes of EVs reaching auction are very low, although leasing companies are watching the used market very closely as they report up to two-thirds of new car orders are for all-electric cars.
“In three to four years we will see a massive increase in EV stock coming to auction. Between now and then used prices will settle down to give vendors some idea of what cars are going to be worth in the new electric age,” said Potter.